Digital products in non-digital core business: when does “digital” become the new “core”?

Arthur D. Little’s executive roundtable on “digitalization” was conducted in a format that combined impulse presentations from executives with interactive discussions between all participants. For the seventh roundtable, “Hands-on”, in April 2018, the participants met at the Munich Airport Center and discussed several topics inspired by the question, “When does digital become the new core?” The main focus of the cross-industry discussions were insight and solutions for how to stay competitive in environments where “digital business” required new ways of working and thinking and became even more important than the “core” offering. In addition, an example in which a high-risk move was properly executed but still failed was discussed, and led to fruitful insight into the often-preached but seldom-accepted principle, “fail fast”.

Digital roundtable “Hands-on”

The seventh Arthur D. Little roundtable on “digitalization” was opened by Jörg Ebbighausen, Senior Vice President corporate development at the Munich Airport Center and the day’s host, and Volker Pfirsching, Partner in Arthur D. Little’s Technology and Innovation Management Practice and head of ADLdigital. The day’s theme was “Hands-on”. The participants could expect deep insight, intense discussions on the presented cases and an airport bus tour to see the context and products of Munich Airport itself from a different angle. The industrial backgrounds of the roundtable’s attendees were as broad as the range of insight: From aviation to insurance, telecommunications, energy utilities and the mobility industry.

Digital products at Munich Airport

Following the introduction Konrad Best, Vice President Digital, gave the first impulse presentation on digital products at Munich Airport. Just like other airports, Munich Airport has a very clear “core” role: primarily, it is an infrastructure provider. For that reason, it had a situation that could be best described as “greenfield” with regard to digital products and services. While core operations were already strongly supported by IT, digital products and services were rather underdeveloped until a few years ago.

Munich Airport has a broad range of services, mainly around the travel journeys of passengers, as well as other customer services. Best explained two main reasons and triggers for the project to digitalize existing and develop new services. On the one hand, it was a “defensive move” in order to stay competitive in the international market. On the other hand, the airport benefited from the “digital education process” of airlines, which provided almost all of its services in a digital way.

Best’s team focused on four work streams to tackle the digital challenge: digital offerings and channels, digital assets, data & IT infrastructure, partners, and organization & culture. The first results confirmed the greenfield assumption of the current service landscape: Seventy-nine out of 80 services were non-digitalized, meaning many services were in place but not digitally reachable for customers.